Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Are the receipts issued by the personal care home appropriate for the purposes of the medical expense tax credit in paragraph 118.2(2)(e) of the Income Tax Act? What are the criteria for determining if an individual, resident in a personal care home, can claim the medical expense tax credit under paragraph 118.2(2)(e) of the Act?
Position: The receipts issued should detail the cost of care or care and training from other costs. In order for an amount to qualify as a medical expense under paragraph 118.2(2)(e) of the Act, the individual receiving care or care and training at the particular place must be certified by an appropriately qualified person to be in need of the specialized equipment, facilities or personnel provided by that place for care or care and training of individuals with the handicap suffered by that individual.
Reasons: Wording in the Act.
2005-011312
XXXXXXXXXX Luisa A. Majerus, CA
(613) 832-3488
May 5, 2005
Dear XXXXXXXXXX:
Re: Section 118.2(2)(e) Receipting
This is in reply to your email dated January 24, 2005, requesting our views on the appropriateness of the receipts issued by XXXXXXXXXX to the residents of a personal care home for services provided. The service includes 24-hour support and supervision by personal care workers trained in accordance with the requirements of the Province of Saskatchewan. In addition, you are requesting information on the criteria to be used by the residents to determine whether it is appropriate to claim the medical expense tax deduction under paragraph 118.2(2)(e) of the Income Tax Act (the "Act").
Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated May 17, 2002. Where the particular transactions are completed, the inquiry should be addressed to the relevant Tax Services Office. However, we offer the following general comments.
Generally, if an individual suffers from a physical or mental handicap and, as a result, receives care, or the care and training, at a particular place, which has equipment, facilities or specially trained personnel specifically made available for the care of individuals with that particular handicap, the fees for the care or the care and training paid to such a place may qualify as a medical expense pursuant to paragraph 118.2(2)(e) of the Act. A personal care home must ensure that these conditions are met and must determine the amount paid before issuing a receipt.
The individual receiving care or care and training at the particular place must be certified by an appropriately qualified person to be in need of the specialized equipment, facilities or personnel provided by that place for care or care and training of individuals with the handicap suffered by that individual. For example, fees paid to an institution which has the staff specially trained to deal with the problems associated with Alzheimer's disease will qualify as a medical expense when paid in respect of an individual suffering from that disease. However, in general terms, we are not aware that a personal care home provides any specialized equipment, facilities or specially trained personnel. On the other hand, where a particular personal care home does in fact provide specialized care aimed at a certain type of physical or mental handicap, we would consider such a personal care home to qualify as an institution or other place of the patient as envisioned under paragraph 118.2(2)(e) of the Act.
We trust this information is helpful.
Yours truly,
John Oulton, CA
For Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Planning Branch
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